Karnataka Gramin Bank

Last updated
Karnataka Gramin Bank
Karnataka Gramin Bank
Company type Regional rural bank
Industry Banking
PredecessorPragathi Krishna Gramin Bank, Kaveri Gramin Bank
Founded4 January 2019(6 years ago) (2019-01-04)
Defunct30 April 2025;3 months ago (2025-04-30)
Successor Karnataka Grameena Bank
Headquarters
Ballari, Karnataka
,
Key people
Shrikant M Bhandiwad (Chairman) [1]
Products
Services
  • Deposit Services
  • Savings accounts
  • Fixed deposits / Certificates of Deposit (CDs)
  • Recurring deposit accounts
  • Personal loans
  • Home loans / Mortgages
  • Car loans / Auto financing
  • Education loans
  • Business loans
  • Credit cards
  • Payment & Transfer Services Debit cards
  • Online banking
  • Mobile banking
  • Wire transfers
  • ATM services (cash withdrawal, deposits)
  • Investment & Wealth Management Mutual funds
  • Retirement accounts (Pension, IRA, 401k)
  • Stock trading & brokerage
  • Insurance (life, health, property)
  • Safe deposit lockers
  • Foreign currency exchange
  • Financial advisory services
  • Business banking (merchant accounts, payroll)
4,400 crore (US$520 million)
(2023–2024)
700 crore (US$83 million)
Number of employees
3600
Parent

Karnataka Gramin Bank was an Indian Regional Rural Bank (RRB) headquartered in Ballari, Karnataka. [2] The bank was founded on 4 January 2019. this is the merger by Ministry of Finance on 1 May 2025 through the amalgamation of two predecessor Regional Rural Banks sponsored by Canara Bank. [3] The institution operates under the regulatory framework established by the Regional Rural Banks Act, 1976. [4] Karnataka Gramin Bank functioned as a scheduled commercial bank serving rural and semi-urban populations across multiple districts in Karnataka state. [5] [6]

Contents

History

The Ministry of Finance announced the amalgamation through Gazette Notification CG-DL-E-07042025-262329 dated 5 April 2025. [7] Karnataka Gramin Bank (formerly Pragathi Krishna Gramin Bank) and Karnataka Vikas Grameena Bank merged effective 1 May 2025. [8] [9] [10] [11]

The consolidation was implemented as part of the Government of India's "One State-One RRB" policy designed to improve operational efficiency. [12] [13] [14] Shreekant Bhandiwad, who previously served as Chairman of Karnataka Vikas Grameena Bank, was appointed as the inaugural Chairman of the merged institution. [15] This consolidation represents part of the broader governmental strategy to enhance Regional Rural Bank operational effectiveness through systematic amalgamation.

Merger and formation

Pragathi Krishna Gramin Bank was formed in 2013 through the merger of Pragathi Gramin Bank and Krishna Grameena Bank. [16] Karnataka Vikas Grameena Bank was constituted in 2005 after amalgamating four Regional Rural Banks under recommendations of banking sector reforms. [17] Regional Rural Banks have evolved significantly since their inception in 1975, with consolidation becoming a key strategy for improving operational efficiency and financial viability. [18] As of March 2024, there are 43 Regional Rural Banks operating across India, sponsored by 12 scheduled commercial banks. [19] The government's consolidation strategy aims to merge these 43 banks into 28 entities for improved operational efficiency. [20]

Operations

Karnataka Gramin Bank maintains its headquarters in Ballari, Karnataka, and adheres to the standard Regional Rural Bank ownership structure involving the Government of India, Canara Bank, and the Karnataka state government as stakeholders. Regional Rural Banks operate under dual supervision from the Reserve Bank of India pursuant to the Banking Regulation Act, 1949, and the National Bank for Agriculture and Rural Development under Section 35(6) of the same legislation. [5] The institution provides comprehensive banking services encompassing deposit products, lending facilities, and payment systems. Karnataka Gramin Bank concentrates on delivering credit and banking facilities to small and marginal farmers, agricultural laborers, artisans, and small entrepreneurs in rural areas. [4]

Branches and digitalization

Karnataka Gramin Bank operates mobile banking applications including "KaGB Connect" and "DiGi KaGB" for instant account opening through selfie-based verification technology. The institution has implemented mobile ATM services to promote digitization initiatives in rural areas. [21] The bank's technology infrastructure encompasses 1,167 branches, with Wipro Limited providing comprehensive technology solutions including core banking systems to enhance digital banking capabilities. [22] [23] Lending operations are conducted in accordance with Regional Rural Bank mandates, focusing on agriculture, rural development, and micro-enterprise financing.

Performance

Regional Rural Banks collectively operate 22,069 branches across India as of March 2024, serving over 31.3 crore deposit accounts and 3 crore loan accounts. [19] Regional Rural Banks in South India have demonstrated significant performance variations, with comparative studies highlighting the importance of operational efficiency and consolidation strategies. [24]

Karnataka Gramin Bank recorded a net profit of ₹14 crore in fiscal year 2020-21 and achieved a total business of ₹57,210 crore in fiscal year 2021-22. [25] [26] The bank's total business grew to ₹61,203 crore in fiscal year 2022-23, demonstrating consistent growth in its operations. [27]

Bank growth

Karnataka Gramin Bank's 2022-23 business growth of 7% exceeded the national Regional Rural Bank average of 5.2%. [19] The Government of India allocated ₹10,890 crore in recapitalisation assistance to Regional Rural Banks during fiscal years 2022 and 2023, intended to strengthen capital adequacy and operational capacity across the sector. [19] Contemporary rural banking trends indicate increasing emphasis on digital transformation and financial inclusion initiatives across India's Regional Rural Bank network. [28]

References

  1. "Board of Directors". Karnataka Gramin Bank. Archived from the original on 22 July 2025. Retrieved 22 July 2025.
  2. "List of Regional Rural Banks functioning in the country". Department of Financial Services, Ministry of Finance, Government of India. Retrieved 2025-07-21.
  3. "Centre merges Karnataka Gramin Bank and Karnataka Vikas Grameena Bank". The Economic Times. Retrieved 2025-07-21.
  4. 1 2 "Regional Rural Banks". Department of Financial Services, Ministry of Finance, Government of India. Retrieved 2025-07-21.
  5. 1 2 "Regional Rural Banks". Reserve Bank of India. Retrieved 2025-07-21.
  6. "List of banks in India". Reserve Bank of India. Retrieved 2025-07-21.
  7. "Gazette Notification of KAGB-KVGB" (PDF). Ministry of Finance, Government of India. Retrieved 2025-07-21.
  8. "Unified Karnataka Grameena Bank to come into existence on May 1". The Hindu. Retrieved 2025-07-21.
  9. "Centre amalgamates two RRBs in Karnataka". The Hindu Business Line. Retrieved 2025-07-21.
  10. "Karnataka to have one regional rural bank after Centre enforces merger". Deccan Herald. Retrieved 2025-07-21.
  11. "New Bank Dharwad". Prajavani. Retrieved 2025-07-21.
  12. "Annual Report 2023-24" (PDF). Department of Financial Services, Ministry of Finance, Government of India. Retrieved 2025-07-21.
  13. "One State One RRB: Central government to merge 43 banks including 2 banks in Karnataka". Vijaya Karnataka. Retrieved 2025-07-21.
  14. "Branch Expansion Guidelines for Regional Rural Banks". Reserve Bank of India. Retrieved 2025-07-21.
  15. "Karnataka Vikas Grameena Bank". Karnataka Vikas Grameena Bank. Retrieved 2025-07-21.
  16. "Master Circular on Regional Rural Banks". Reserve Bank of India. Retrieved 2025-07-21.
  17. "Rural Banks Merger". Prajavani. Retrieved 2025-07-21.
  18. "Regional Rural Banks: Performance and Challenges" (PDF). LBP Research. Retrieved 2025-07-21.
  19. 1 2 3 4 "Empowering Rural Financial Institutions". NABARD Annual Report. Retrieved 2025-07-21.
  20. "The Journey of Regional Rural Banks in India: Evolution Towards Consolidation" (PDF). ELP Law. Retrieved 2025-07-21.
  21. "Karnataka Gramin Bank initiates mobile ATMs to push digitisation in rural areas". ANI News. Retrieved 2025-07-21.
  22. "Wipro to tech-ready 1,167 branches of Karnataka Gramin Bank". The Hindu. Retrieved 2025-07-21.
  23. "Wipro deploys core banking solutions platform for Karnataka Grameena Bank". Business Standard. Retrieved 2025-07-21.
  24. "Comparative Study on Selected Regional Rural Banks of South India" . Retrieved 2025-07-21.
  25. "Karnataka Gramin Bank records ₹14 crore net profit in 2020-21". The Hindu Business Line. Retrieved 2025-07-21.
  26. "Karnataka Gramin Bank clocks ₹57,210 crore total business in 2021-22". The Hindu. Retrieved 2025-07-21.
  27. "Karnataka Gramin Bank achieves ₹61,203 crore total business in 2022-23". The Hindu. Retrieved 2025-07-21.
  28. "Rural banks drive digital transformation to boost financial inclusion". Mint. Retrieved 2025-07-21.